"But they can give peace of mind to those who prefer not to own investments that conflict with their religious beliefs."

But be careful. Faith-based funds are not all alike. Companies that support abortion and gay causes, for example, are objectionable to Evangelical Christians and Catholics. Muslims, who are forbidden by the Koran to earn interest, won't invest in financial companies, companies with a lot of debt or bonds. And they avoid companies that deal with pork.

Most faith-based bond funds primarily invest in U.S. Treasury and government agency bonds. Then again, MMA Praxis funds invest based on the pacifist views of the Mennonites. So the funds avoid defense companies. That includes U.S. Treasury securities because the U.S. government supports defense. Of course, U.S. Treasury securities are considered about the least risky of all investments due to their U.S. government guarantees. So you need to consider this issue very carefully.

Meanwhile, The American Trust Allegiance Value Fund, which caters to Christian Scientists, won't invest in medical or pharmaceutical businesses.

Unlike most other faith-based funds, the Ave Maria Fund Group, a Catholic values investment company, will invest in gambling, alcohol and arms and defense stocks. But abortion and gay rights are off-limits.

"Gambling and alcohol are mortal sins not venial sins," said George Schwartz, president of Schwartz Investment Counsel, Bloomfield Hills, Mich., the investment advisor of the Ave Marie funds. "Alcohol is used in the sacraments of the Mass. There is a Catholic doctrine for just wars and self defense. Defense and tobacco are not anti-Catholic."

The Roman Catholic Church does not endorse the fund group. But the fund group's Catholic advisory board includes Cardinal Adam Joseph Maida of Detroit, Schwartz said.

"We don't try to be all things to all people. We are fund for conservative Catholics. We don't invest in abortion, pornography-related companies or companies that contribute to Planned Parenthood."

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Spouses Gail Liberman and Alan Lavine are syndicated columnists. You can purchase Alan Lavine & Gail Liberman's latest book Quick Steps to Financial Stability (QUE Publishing 2006) online at www.moneycouple.com or at your local bookstore. E-mail them at MWliblav@aol.com.